It uses the vBulletin photo gallery upload utility. Unfortunately I do not have access to any sort of image quality settings. My typical process is:
1. Download peoples pics to my computer
2. Hit the upload button on the forum and push the photos to canreef's gallery.
3. Link to the photos that are in the canreef gallery.
I suppose you could think of it this way, it puts everyone on a level playing field of equally crappy resolution photos
